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Deals

Advanz Pharma draws private equity interest as creditors want out: sources

FRANKFURT/LONDON (Reuters) - Drugmaker Advanz Pharma has drawn interest from private equity funds, including U.S. buyout fund Carlyle, as its creditors are scrambling to find a new owner following a debt restructuring deal last year, sources familiar with the matter said.

Carlyle, which recently hired GlaxoSmithKline’s former chief financial officer Simon Dingemans to lead its healthcare coverage across Europe, is among a group of bidders that have handed in indicative offers for the London-based firm, the sources said.

Nordic Capital and TDR have also joined the auction which is led by U.S. investment bank Jefferies, they said.

The process is challenged by diverging views on valuation as Advanz’s creditors are aiming for a price tag of about $2 billion while private equity bidders are wary of paying up after previous attempts to sell the business fell through, the sources said.

Advanz Pharma, Carlyle, Nordic Capital and TDR declined to comment.

Advanz’s creditors are hoping the business could fetch at least eight to nine times its estimated 2020 core earnings of $240 million, the sources said.

The company, which was formed from the 2015 merger of Concordia Healthcare and AMCO, makes a wide range of drugs used in endocrinology, urology, pain management and cardiology among other therapeutic areas.

In 2018 the drugmaker, which was trading on Nasdaq as Concordia, was delisted as part of a debt restructuring deal and then rebranded Advanz Pharma.

Its debt was slashed by $2.4 billion as part of its restructuring which saw Blackstone’s credit investment arm GSO taking control along with Bybrook and Solus.

On Nov. 6, Advanz Pharma reported third-quarter 2020 revenue of $129 million, with a net loss of $42 million.

Its third-quarter 2020 adjusted core earnings declined to $53.5 million from $55.9 million in the same period in 2019 and $65.1 million in the second quarter of 2020.

Advanz also provides off-patent medicines which it regularly buys from big pharma groups such as GSK, Novartis and Abbott.

Reporting by Arno Schuetze and Pamela Barbaglia; editing by Emelia Sithole-Matarise

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